I wanted to look back on what has happened over the last twelve months within the world of Sorare. I am isolating Sorare specific changes, updates and impacts so not taking wider macro environment factors into account which may of course have had varying levels of impact.
Perhaps more importantly, I feel one of the biggest driving factors towards success for Sorare is overall customer sentiment. Now there’s often a case to be had where some user sentiment is baseless and unwarranted, we’ve all witnessed that. But I’m referring to things on the whole — if sentiment is good, propensity to spend is likely to be higher, propensity to recommend Sorare to friends is likely to be higher, propensity to not complain is likely to be higher.
Primarily, I’m looking at how this stacks up versus what users “earn”. What I’ve noticed over the past year is often when secondary volumes are low, so too is sentiment. When sentiment is better, it often seems correlated to steadying or rising secondary market volumes. There’s often a debate whether Sorare is an investment or not, and more so whether users play the game with the primary goal of ROI. My hypothesis is that this is indeed the case for the large majority, but let’s layer it against some significant elements that have happened over the year to see what impact these had.
I’ve charted the impactful moments on this graph against two lines. The blue line is the weekly volume traded on the secondary market. The red line is the weekly ratio of primary to secondary market volume, i.e. a score of 2 would mean for every $1 spent on primary, $2 is spent on secondary for that week. It looks a bit messy, but I’ve touched on each of the talking points below in a little more detail. You might want to refer back to the graph at various stages!
Disclaimer: this is 95% Sorare Football focused, but I assume that’s not a million miles away from the users who might read this, and neither too far away from the share of revenue, importance and mindspace between sports within the Soraresphere.
ETH:USD lowest point of the year was 1st January 2023 and the highest point was 7th December 2023. Charting the price trend over the year makes it hard to draw conclusions that ETH price has any significant impact upon Sorare card prices. With the introduction of the cash wallet in August, I believe it is further confirmation that the large majority consider valuations in USD/EUR/GBP rather than ETH, rightly or wrongly according to some.
We started the year with a bit of a World Cup hangover, and perhaps, an underwhelming Global Cup campaign from Sorare where many expected a significant jump in users. This was quickly forgotten about when rumours of the PL joining became stronger and on 30th January 2023 it was officially announced, driving strong numbers for Sorare — in fact it was their best week of the year in terms of gross profit (earnings - payouts). You can see in the graph a little further down.
Just before that, the secondary market saw an upwards trend ahead of new threshold changes and presumably users aiming to re-organise their galleries to fit various scarcity cap modes. Unfortunately however not long after, much of the userbase felt that the new minting of PL cards mid-season led to an influx of cards on the primary market and significant demand for these cards as opposed to existing cards that users owned, this led to a fairly steep decline in secondary volumes and indeed the primary:secondary ratio.
There’s a sharp reverse following that then the next couple of months see auction revenue remaining steady, (within which time Pranksy joins the platform), as secondary volumes decline and the ratio runs closely in parallel. That can potentially be attributed towards the main European seasons beginning to wrap up.
Then we have list-or-play and the 5% secondary market fee introduced. Around this point in early/mid-May, sentiment was quite low across the board and it took Nicolas’ rousing 10x tweet and some roadmap articles to stimulate things again. Shortly after that, collection bonuses drove a new angle and positive intent around the platform, which we can see in the rise in both secondary market volumes and ratio end of May/beginning of June.
The summer months remained relatively steady ahead of August ramp up, new season coming. The cash wallet was introduced August 1st and was complemented by a significant jump in new users around that time. After much uproar, the fitness bonus was scrapped in late August. These all contributed to a rise in user sentiment, and a rise in secondary volumes through August.
On a side note, in an article I wrote back in August, I predicted then that Sorare would end the year around ~$51m gross profit (revenues — payouts). They’re at $49.7m now with two weeks to go. Earning roughly $740k for each of those two weeks (the average for the last few) would put my guess pretty close! 😉
Then came the new season 3D cards, which should in turn create buzz, excitement and positive user sentiment amongst the community. Indeed it might have done for a short period of time, however when secondary volumes fall fairly steeply, that has a larger impact on sentiment I feel. And that was indeed the result of the new season cards being launched. I must admit the treasure hunt was captivating for a short period of time, but Sorare could have and should have done so much more around this. It strikes me as paying a PR agency a significant wad of cash only to appeal to a very small number of crypto savvy people, completely missing the potential target audience.
Month-long competitions = downward pressure, and things weren’t looking rosy from a sentiment perspective, alas secondary volumes were trending downwards.
It took another roadmap update, the Rivals beta and Nicolas’ “no BS” message to create some element of upward pressure. NBA Season Two was then launched, with a significant change in minting, which initially users liked the sound of but quickly realised that meant less rewards. It seems the two American sports may well have an even steeper uphill battle than football.
We move to November and the secondary market volumes are already at a low. Many didn’t initially like the sound of instant-buy, however the PL Winter Competitions countered that somewhat for a slight bump in secondary volumes. Shortly after though, things were trending negatively once again and we see a small spike around the time of the new Bundesliga and La Liga kick off competitions designed for new users, where graphs were shared of a large increase in new weekly users to the platform, despite the sceptics. Some positive crypto momentum and ETH’s 2023 high to date hitting on 7th December is also likely to have contributed to the upturn here.
Lastly, we end with Reward boxes and DNPs being introduced into the prize pools. This last point in particular has led to a further suppression of the secondary market, the primary:secondary ratio and ultimately customer sentiment.
The good news is, there’s still ~10 days left of the year, meaning there’s still time for some good news to carry us into 2024… maybe?
The other thing to layer over all of this data is, not only are secondary volumes lower, but there are now more users to share that amongst. Not to mention the trend line of primary:secondary ratio that Sorare have been chipping away at all year. There’s less money to go round and house needs to eat first. Herein lies the core issue. Many users sentiment-o-meter may well be misaligned to a former heyday where things were all sunshine and rainbows and there was a lot more food to feed a lot fewer mouths. I’ve referenced it before that users have needed to adjust their expectations for a long time, many have and many have “put up with” Sorare botching certain things. However, I fear Sorare somewhat have neglected and forgotten their core customers in pursuit of something else. Laird referenced in his Off-topic with a topic podcast today how perhaps we, the core users, got it wrong and we’re in the wrong game for what we expect. However, Sorare have the existing customers to thank for where they are today, on top of building a fantastic, addictive product of course. Does the fantastic, addictiveness work on the next set of users to onboard, and do they deliver the revenues that the historic customer base has done up to now?
Various things I’ve written about over the past year, ideas on changing gameplay, stimulating the market etc., have been about trying to improve the platform for both Sorare and the userbase, not just short-term but for the long-term. Of course it’s expected sentiment that will ebb and flow but unfortunately it feels like some of the recent updates from Sorare are neglecting sentiment entirely. Those decisions may well be the right choice for the platform long-term but at what cost, and are all costs (the impact of sentiment) considered? I sincerely hope it’s a cost they can afford.
I have likely forgotten/neglected to mention a number of other swaying factors over the last year but these were the ones that stuck out to me as impactful towards sentiment, either for better or for worse, and alas for secondary market volumes.
Sorare may well be able to notch this year down as a success overall — PL onboarded, more users than ever before, app development, mobile first experience, ability to instant buy cards within the app, rivals, multiple new rollouts to UX and design, cash wallet, club shop, socoins, collecting becoming a thing, the list goes on. Kudos to the team for some great developments. However, I dare say they might finish 2023 with a bitter taste in respect to what could have been. I am confident that projections 12 months ago, from both a user and a revenue front, would have been significantly more than what we’ve arrived at today.
Customer sentiment & secondary market volumes might be a bit of a catch-22, chicken and egg, self-fulfilling prophecy. Which one pushes or pulls the other? I believe they are closely linked and the key to Sorare delivering a successful 2024, so the goal should be to reduce circumstances where either may drop further.
We’ve had a pretty bumpy ride through 2023, so for those still here, here’s to a successful 2024 for both Sorare and us!
